Libby Purvis (or one of those BBC matriarchs) made an interesting point a coupla weeks ago. Comparing folk to country she reckoned C&W had moved on because once the cowboys got rid of their horses the songs moved onto cars and shopping malls in a way that folk hadn't been able to. The facts aren't watertight but it's a useful idea.
Folk purity is about normal lives in a big and often uncaring universe, not just authenticity to ploughing and shipbuilding.

You could update the incidentals and the honesty and keep the instrumentation acoustic but it would split the 'community' down the middle as to whether it was 'folk'. The idea of a musical Eden of indigenous ballardeers just doesn't hold water so where do you draw the line and who's going to volunteer with the chalk?